News

Here is an update on the charity wine auction issue in BC, following the receipt of additional information from the LCLB. The BC Government introduced legislative amendments last week which were intended to deal with this. The issue first arose last summer/fall when the LCLB made changes to its policy manual and took the position that fundraising wine auctions of privately donated wine were not legally permitted in BC despite the fact that such auctions had been regularly held and licensed without problem for close to three decades. The donation and auction of privately donated wine is extremely important to charities and non-profit groups because the most valuable wine for fundraising is usually older or rarer wine which is donated from private cellars. Following negative media attention and an expression of major concern by affected charities and non-profit organizations, the government issued a press release in the fall of 2012 indicating that fundraising wine auctions would be permitted ... but which did not mention privately donated wine. A short while later in November 2012, the LCLB issued Policy Directive 12-08 which confirmed that wine auctions were permitted if they were held under a special occasion license with wine sourced only from the LDB. In addition, non-licensed auctions and auctions of privately donated wine would be permitted but only if the wine was contained in "gift baskets" or "the equivalent", thus providing a temporary workaround although one based on an odd distinction which appears to have no basis in law. Finally, this past week, legislative amendments were introduced under the Miscellaneous Statutes Amendment Act (see part 3). Here is a review of what has been proposed and the issues related to the amendments.

Permit System Created. The amendments establish a permit system which was not previously required. Charities and some qualifying non-profit organizations would be able to apply for a permit to hold a fundraising wine auction. There would be an exemption from the permit requirement for "small quantities" of liquor which amount has not yet been defined. Organizations wishing to both serve wine and auction wine (which is the most common type of fundraiser) may have to obtain both a special occasion license and an auction permit depending upon whether the event was held in an unlicensed location or if the charity did not want to pay the wine prices commonly associated with serving wine in licensed premises.

Privately Donated Wine. As noted above, it is critical for the affected organizations to be able to accept private wine donations and to auction the wine in order to fundraise effectively. The amendments themselves do not make any mention of privately donated wine (which was the issue that created this problem in the first place). However, I have confirmed with the LCLB that the intention is that regulations will eventually be issued that will allow an auction permit holder to receive private donations and to auction the donated wine.

Non-Profit Organizations. The proposed amendments only permit fundraising wine auctions for registered charities and for those non-profit organizations that will use the funds generated for charitable purposes. Non-profit organizations that are not technically charitable are not included (and there are many of these).

As noted previously, while the government and LCLB are to be commended for acting relatively quickly on this issue, it is not clear whether the amendments will get passed before the current short legislative session ends. In addition, it is unclear to me why non-profit organizations that are not charitable are being left out. My review of similar provisions in Alberta, Washington state, Oregon and California shows that none of those jurisdictions leaves such organizations out (for an example, see the Napa Valley Premiere fundraiser which raised over $3 million last week). In addition, I am aware that BC politicians on both sides of the house regularly include wine in their political fundraising auctions (which are not charitable). It seems particularly inappropriate to include such a restriction in BC law ... when none of our neighbours do so ... and when our elected politicians have regularly done the same thing.